City takes new steps to promote ESG
The trade promotion agency is stepping up efforts to support the city’s business owners, helping enhance their environmental, social and governance (ESG) credentials and raise their competitive edge in the global market.
The Trade Development Council will add ESG consultations to its Transformation Sandbox programme for small and medium-sized enterprises (SMEs), which also offers branding and digitalisation advisory services.
The council expects to hold more than 100 consultations related to ESG at no cost to business owners, hoping to change their mindset about the sustainability factor in their operations.
The offer will be extended to some 500 SMEs in various sectors including construction, transport, catering and services.
“For a lot of SMEs, during the pandemic period or even now, it is not easy,” said Patrick Lau, the council’s deputy executive director.
“They do not want the extra pressure of higher cost. But if they do not participate, more customers might be lost.”
Dun & Bradstreet, a US-based information provider, will participate in the programme by helping assess and certify companies’ ESG credentials. It will waive a HK$25,000 fee for the first 50 SMEs that apply and qualify during the promotion. Others could enjoy a HK$1,700 discount before July.
Lau said the city’s SMEs showed less passion for ESG consulting during the Covid-19 pandemic.
The biggest challenge “is to recognise ESG is not just a compliance model, but a business opportunity”, he added.
Hong Kong-listed companies are required to publish annual ESG reports alongside their periodic financial reports to shareholders. However, the requirements are not imposed on more than 350,000 privately owned SMEs that make up about 98 per cent of the businesses in the city.
Simon Ng, chief executive of the Business Environment Council, said a more transparent ESG profile would give SMEs an advantage, especially when they took part in global supply chains.
Good ESG reporting and disclosures would also help small companies see more funding opportunities, said Michelle Mak, D&B’s ESG head in Hong Kong. With such credentials, firms could also qualify for a growing pool of “green loans”, she added.
Bank of China (Hong Kong), for example, started a specific financial incentive scheme for SMEs with fee waivers to spur ESG targets. HSBC Holdings also offers loans with interest rates linked to ESG performance.
The Trade Development Council held a seminar on Thursday, which was “really helpful”, said Joanna Cheng, the owner of IL Sarto.
“We are a small company. We do not have a lot of research power or labour to help us understand this,” she added.
The company did not intend to engage D&B’s services for now because “we do not have a lot of [ESG] data to provide”, she said.